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Joint Borrower, Sole Proprietor – Buy to Let:

Sara lives with her parents and wanted to get onto the property ladder and purchase a property for investment purpose.

She had saved up a sizeable deposit, however, as she was not a residential homeowner and had a lower income, she did not think it was possible to do this.

Sara approached one of our Advisors, to get some advice on how she could proceed with a purchase of an investment property.

As her parents are homeowners, our Advisor suggested that they go on the mortgage with her as joint borrowers, sole proprietor. This means that her parents can provide the status of ‘homeowner’ required for the application, but they would not go on the mortgage deeds and therefore the property would only be Sara’s name. The lender would only require her parents to obtain independent legal advice, to confirm that they understand the legal implications of the transaction.

The lender was also able to use the parents disposable income and provide a loan of 75% of the value of the property. Usually, for buy to let mortgages, the lender works off the monthly rental income to determine the loan amount.

Sara was pleased that she was able to get onto the property ladder and purchase her desired property, with the assistance of her parents.

Please note, that the case study is based on a real-life scenario, but names have been changed due to client confidentiality.

Published Feb 2021.

It is important to take professional advice before making any decision relating to your personal finances. Information within this case study is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for information purposes only.